CIS guide for subcontractors
How to calculate CIS from a net amount
You know what you want in your pocket. Here is how to work out what to invoice so the CIS deduction doesn't eat into it.
The formula
Gross invoice (before VAT) = (net payment − materials) ÷ (1 − CIS rate) + materials.
At 20%, divide the labour part by 0.8. At 30%, divide by 0.7. Materials are added back unchanged because CIS is not deducted from them.
Worked examples
All figures are before VAT.
| Take-home wanted | Materials | Rate | Invoice | CIS deducted |
|---|---|---|---|---|
| £800 | £0 | 20% | £1,000 | £200 |
| £1,000 | £200 | 20% | £1,200 | £200 |
| £1,500 | £0 | 20% | £1,875 | £375 |
| £700 | £0 | 30% | £1,000 | £300 |
When this matters
Price work agreed as a day rate ‘in hand’ — for example £200 a day take-home — needs grossing up before you invoice, or you will be short every week.
At 20%, a £200 take-home day is a £250 invoice. At 30% it is about £285.71. Our CIS calculator has a net-to-gross mode that does this for you.
Net to gross questions
How do I gross up a CIS payment at 20%?
Divide the net labour amount by 0.8. For example, £800 net labour ÷ 0.8 = £1,000 gross labour. Add any materials back on at cost afterwards.
How do I gross up at 30%?
Divide the net labour amount by 0.7. £700 net labour ÷ 0.7 = £1,000 gross labour.
Why not just add 20% on top?
Because the deduction is 20% of the gross, not of the net. Adding 20% to £800 gives £960, and 20% of £960 is £192 — you would receive £768, not £800.